Thursday, 21 December 2017

Eni begins producing from Zohr

Eni begins producing from Zohr

Eni has produced its first gas from the supergiant Zohr field in a record time for this type of field of less than two and a half years. The discovery, which is in the Shorouk Block, offshore Egypt approximately 190 km north of Port Said, has a potential in excess of 30 Tcf of gas in place (about 5.5 billion barrels of oil equivalent).

Zohr, discovered in August 2015, obtained the investment authorisation after just six months in February 2016. It is the largest gas discovery ever made in Egypt and in the Mediterranean Sea and will be able to satisfy a part of Egypt’s natural gas demand for decades to come.

Zohr is one of Eni’s seven record-breaking projects, which have involved rapid development and production, and is a testament to the success of Eni’s Dual Exploration Model, adopted by 2013. The approach is based on a simple principle: while the reserves of hydrocarbons grow through the exploration successes, Eni can benefit from early monetisation thanks to the sale of minority stakes, all while maintaining operatorship of the asset. 

By parallelising exploration, appraisal and development phases, the time-to-market is quicker, equity development cost is lowered, and Eni achieves an accelerated cash flow. This winning combination allowed Eni to generate $9bn from its exploration activities between 2014 and 2017.

Eni’s CEO, Claudio Descalzi, commented: “Today is a historic day for us. It further confirms the capability of Eni’s women and men to turn challenging opportunities into unprecedented achievements. The start-up of Zohr is the direct result of our unique know-how, our ability to innovate in technology and of our tenacity in pursuing even the most challenging goals, of which we are very proud. 

“This project has been possible exploiting to the maximum level the competences, the skills as well as the human and infrastructural capabilities that this Country offers in terms of local content. It will completely transform Egypt’s energy landscape, allowing it to become self-sufficient and to turn from an importer of natural gas into a future exporter.

“I would like to thank the Egyptian Authorities and all our Partners in this incredible project for their all-important contributions and the whole Egyptian petroleum sector which provided full support to achieve Zohr project in a record time”.

Eni holds a 60% stake in Shorouk Block, Rosneft 30% and BP 10%. The company is co-Operator of the project through Petrobel, jointly held by Eni and the state corporation Egyptian General Petroleum Corporation (EGPC), on behalf of Petroshorouk, jointly held by Eni and the state company Egyptian Natural Gas Holding Company (EGAS).

Eni has been present in Egypt since 1954, where it operates through its subsidiary IEOC Production BV. The company is the Country’s main producer with an equity production of approximately 230,000 barrels of oil equivalent per day.

A.P. Moller-Maersk exits Egyptian Drilling Company Joint Venture

A.P. Moller-Maersk exits Egyptian Drilling Company Joint Venture

Mærsk A/S and Egyptian General Petroleum Corporation have recently signed an agreement whereby EGPC will acquire A.P. Moller-Maersk’s 50% shareholding in Egyptian Drilling Company for $100 million in an all-cash transaction.

Following the transaction, Egyptian General Petroleum Corporation will become sole owner of Egyptian Drilling Company and will as part of the agreement take over the entire portfolio, obligations and rights.

Egyptian Drilling Company is one of the leading drilling operators in the Middle East and operates 70 rigs in total of which the majority are land-based drilling rigs. The divestment of Egyptian Drilling Company is in line with Maersk Drilling’s strategy to focus on offshore drilling in the harsh environment and Deepwater markets.

“I am very pleased with this agreement with Egyptian General Petroleum Corporation. The divestment is a natural consequence of our announced long-term plans to exit the Egyptian Drilling Company joint venture when the timing was right. Egyptian Drilling Company has a very strong position in the Middle East, and I am confident that the new ownership will enable Egyptian Drilling Company to develop its business and capabilities even further,” says Jørn Madsen, CEO of Maersk Drilling.

Egyptian Drilling Company began operations in 1976 as a 50/50 joint venture between Maersk Drilling and Egyptian General Petroleum Corporation, which is owned by the Ministry of Petroleum and Mineral Resources in Egypt. EDC employs approximately 5,000 people, whereof 34 are Maersk Drilling employees. Maersk Drilling is currently looking into future job opportunities for its employees in Egyptian Drilling Company.  

Santos and GLNG partners deliver another 15PJ into Australian domestic gas market for 2018

Santos and GLNG partners deliver another 15PJ into Australian domestic gas market for 2018

Santos and its GLNG partners have signed an agreement to deliver 15 petajoules (PJ) of gas from the company’s export portfolio into the Australian east coast domestic market in 2018.  Santos holds a 30% interest in GLNG.

15 PJ of gas is about 2% of expected 2018 domestic demand and enough to cover half of any shortfall that might arise under the ACCC’s high demand case for next year.

Origin has agreed to purchase this gas from GLNG for supply to its Australian household, industrial and power generation customers. 

The agreement covers a seven-month period from April 2018 to October 2018, coinciding with increased winter demand in southeastern Australian markets.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said the agreement demonstrates the GLNG joint venture’s commitment to ensuring energy security for the Australian east coast domestic market.

“Santos and our GLNG partners are delivering on our public commitment earlier this year to meet domestic gas demand while also honouring our long-term LNG contract obligations,” Mr Gallagher said.

“As highlighted by the ACCC earlier this month, there is already enough gas supply to more than cover expected domestic demand in 2018.  This additional supply from GLNG is enough to also cover half of any shortfall that might arise under the ACCC’s high demand case for 2018.”

“Santos and our GLNG partners are drilling around 250 more wells in 2018 and this means more gas supply for both the domestic gas market and our LNG export markets going forward.”

When combined with existing agreements announced earlier this year, today’s announcement brings GLNG’s domestic contributions to more than 60 PJ over the next two years.

Tuesday, 19 December 2017

Statoil acquires 25% of the Roncador field in Brazil

Statoil acquires 25% of the Roncador field in Brazil 

Statoil and Petrobras have agreed that Statoil will acquire a 25% interest in Roncador, a large oil field in the Campos Basin in Brazil. 

The transaction nearly triples Statoil’s production in Brazil, with attractive break-evens and potential for additional value creation for both parties through the application of Statoil’s expertise in improved oil recovery. The total consideration comprises an initial payment of $2.35 billion, plus additional contingent payments of up to $550 million.

“This transaction adds material and attractive long-term production to our international portfolio, further strengthening the position of Brazil as a core area for Statoil. We are also pleased to advance our strategic partnership with Petrobras by expanding our technical collaboration, sharing technology, competence and experience to increase oil and gas recovery,” says Eldar Sætre, president and chief executive officer of Statoil.

Roncador was the largest discovery offshore Brazil in the 1990s and is currently the third largest producing field in Petrobras’ portfolio with around 10 billion barrels of oil equivalent in place and an expected remaining recoverable volume of more than 1 billion boe. The ambition is to increase the recovery factor by at least 5%, bringing the total remaining recoverable volumes to more than 1,500 million boe.

The field has been in production since 1999 with output, during November 2017, of around 240,000 barrels of oil per day plus around 40,000 boe per day of associated gas. The transaction increases Statoil’s equity production in Brazil by around 175% to around 110,000 boe per day from around 40,000 boe per day. Petrobras retains operatorship and a 75% interest.

In conjunction with the transaction, the two companies are entering into an agreement with the aim of maximising value creation and the longevity of the Roncador field. Statoil will leverage its IOR technology, competence and experience from the Norwegian Continental Shelf (NCS) and elsewhere, and Petrobras its experience as the largest deep-water operator and pre-salt developer in the world. Several specific opportunities for increased recovery and value creation have already been identified.

"Strategic partnerships are an important part of our business plan and Statoil's knowledge and experience in increasing the level of oil recovery in mature fields will add value not only to our joint operations in Roncador but to other mature fields in the Campos Basin, with huge potential to positively impact future production in the area," says Pedro Parente, chief executive officer of Petrobras.

Petrobras and Statoil are partners in 13 areas in either the exploration or production phase, ten of which are in Brazil and three abroad. The acquisition will strengthen Statoil as one of the biggest oil producers in Brazil, operating the Peregrino field and block BM-C-33, both in the Campos Basin and the BM-S-8 block in the Santos Basin.

“We look forward to working with our partners to maximise the upside potential from the Roncador field. The combination of Statoil’s experience in improved oil recovery and Petrobras’ deep-water and pre-salt expertise will enable us to extend and increase production, and therefore value and cash flows, to the benefit of Brazil, both companies and the supplier industry”, says Anders Opedal, Brazil’s country manager.

Statoil has been deploying its IOR expertise across its global portfolio and has achieved an average recovery rate on the NCS well above the worldwide industry average, with the ambition to increase further. Around 3,000 Statoil employees worldwide work on initiatives related to IOR. The projects for IOR collaboration between Statoil and Petrobras will be overseen by representatives from both companies.

Statoil and Petrobras have also agreed that Statoil will have the option to utilise part of the capacity at Petrobras’ Cabiúnas natural gas terminal to allow for the future development of BM-C-33, where both companies are partners, and which contains the world class Pão de Açúcar discovery.

This marks an important next step in developing Statoil’s position in the Brazilian natural gas market which is on the verge of major transformation. Statoil has more than 35 years of experience in building gas value chains, as the second largest natural gas supplier in Europe and an operator of premium shale gas plays in the US onshore with mid- and downstream positions.

Petrobras CEO Pedro Parente has come to meet Statoil CEO Eldar Sætre in Oslo for the signing on 18th December, which follows the Memorandum of Understanding agreed between the two companies in August 2016 and the Heads of Agreement in September 2017.

The effective date for the Roncador transaction is 1st January 2018. Closing is subject to certain conditions, including government approval.

Rosneft Board of Directors approves “ROSNEFT-2022” strategy

Rosneft Board of Directors approves “ROSNEFT-2022” strategy

Rosneft Board of Directors approved the “Rosneft-2022” Strategy aimed to qualitatively change the Company's business by introducing the advanced management approaches and new technologies, increasing the returns of existing assets of the Company.

“Rosneft-2022” meets the modern challenges of the energy industry in full. The strategy provides for increasing the business profitability and the returns on key assets by intensifying the development, focusing on the implementation of key projects and changing the management model that will allow to replicate new technologies at a growing rate and to bring the company to a whole new level   taking into account the challenges of the digital era.

The new Strategy basis will be the development of a business that meets the highest ecological, environmental and industrial safety standards. Rosneft undertakes to enter the first quarter of the of the world's oil and gas companies’ list by 2022 by approving the “Rosneft-2022” Strategy in 2017 announced as the “Year of Environment” by President of Russia Vladimir Putin.

To achieve the set of goals the Company needs to implement a number of strategic initiatives as follows:
To keep the leadership by unit costs in production with a decrease in unit operating costs by 2-3% per year under comparable conditions; create a stable technological advantage and intensify the production; develop gas business; strengthen the technological effectiveness of the service business; develop petrochemical business by allocating an existing portfolio of assets into a separate business with separate financial records; improve the quality of investment and project management; work on increasing investment discipline and optimising investment project portfolio throughout the value chain will be continued; provide technological development and digitalisation. An important element of the strategy is digitalisation and accelerated technological development in all spheres of operation of the Company, mainly by way of accelerated replication of approved digital solutions; and finally, to adopt the holding management structure, to implement a pilot project in retail. 

During the development of the “Rosneft-2022” Strategy detailed diagnostics of the condition, environment and challenges in every business segment of the Company were conducted. For every business line, strategic initiatives were studied in detail, which will allow to develop and implement strategic priorities, defined earlier by Rosneft CEO Igor Sechin at the Annual general meeting of shareholders.

Commenting on the “Rosneft-2022” Strategy, Mr Sechin said: “Today the Board of Directors approved the strategy of change of the Company’s business, which provides for getting to the new quality level of its development. Increasing the Company’s valuation in every business line involves effective use of internal resources with consideration to the constraints of the environment. The “Rosneft-2022” Strategy will have a significant positive influence on the Company’s shareholder value of 15-20% of current market capitalisation. Also, the shareholders will get additional revenue due to changes in dividend policy as part of “Rosneft-2022” Strategy – the minimal level of dividend payments, made by the Company, is increased to 50% of net IFRS profit.”

Commenting on the results of the Board meeting, Chairman of the commission for strategic planning of the Board of Directors of Rosneft, BP Chief Executive Officer Robert Dudley pointed out: “I am glad for the opportunity to take part in the development of the “Rosneft-2022” Strategy. I should note that all key issues were studied in detail.”

Early start for Wintershall: production begins one year ahead of schedule

Early start for Wintershall: production begins one year ahead of schedule

Wintershall and its licence partners Petoro and Spirit Energy have started production at the Maria field one year ahead of schedule. Costs have been reduced by more than 20% compared to plan. 

Oil production has now begun, whereas originally start-up was intended for the fourth quarter of 2018. At an expected final investment cost of around 12 billion NOK, the project will stay more than 3 billion NOK below the original budget. Maria is the first own-operated field in Norway, which Wintershall takes all the way from exploration, through development and to production.

 Following a solid growth course on the Norwegian Continental Shelf, Wintershall Norge has increased its daily production from 3,000 boepd in 2009 to around 100,000 boepd today.
“Ahead of schedule and below budget: Maria is a major achievement for Wintershall, our partners and our suppliers. In challenging times, we have kept a clear focus on smart engineering and sharp project management,” said Martin Bachmann, Wintershall Executive Board Member for Exploration and Production in Europe and the Middle East

“The fact that we have achieved this so quickly without incidents is a real credit to the whole team that worked so hard to make this happen. The experience gained in the Maria project will serve as a blueprint, for our Nova development, previously known as Skarfjell, and worldwide.”

Wintershall and its partners submitted the Plan for Development and Operation to the Norwegian Ministry of Petroleum and Energy in 2015. For Hugo Dijkgraaf, Wintershall Norge Managing Director and until recently Maria Project Director, Maria’s early production kick-off is also a signal: “Delivering a production start-up 2 years and 3 months after PDO approval by the ministry for such a complex offshore project is a testament to Wintershall’s capability to deliver on development projects. 

“Construction and installation of the subsea equipment and pipelines were completed without any major problems or delays, and this summer we drilled some of the most efficient wells in the history of the Haltenbanken area. This excellent progress would not have been possible without the cooperation of Statoil as an operator on the host platforms. Maria is a role model for an outstanding cooperation between operators and suppliers,” said Mr Dijkgraaf.

In combination with an innovative procurement approach, Wintershall awarded more than 90% of all Maria contracts to companies based in Norway culminating in an expected work amount of 34,000 man-years over the Maria lifetime.

The subsea Maria field in the Haltenbanken area of the Norwegian Sea is connected via subsea tiebacks to the Statoil-operated Kristin, Heidrun and Åsgard B production platforms, making it one of the most complex underwater projects in the world. By tying into local infrastructure and with a planned 25-year lifespan, Maria could also help prolong the production horizon of surrounding fields. 

“It is a complex plan, but we focused on simple execution. By using tried and tested components, and working closely with excellent suppliers, we have delivered a field that will continue to return value to us, our partners, and the whole of Norway, for many years to come,” said Jens Balmer, Head of Maria Project. 

The Maria well-stream will go to the Kristin platform for processing while the supply of water for injection into the reservoir will come from the Heidrun platform and lift gas will be provided from Åsgard B via the Tyrihans subsea template. Processed oil will be shipped to the Åsgard field for storage and offloading to shuttle tankers. Gas will be exported via the Åsgard Transport System to Kårstø.

The Maria field is located approximately 20km east of the Kristin field and about 45km south of the Heidrun field. Wintershall Norge is the operator of the license with a 50% share. Petoro has a 30% share and Spirit Energy owns the remaining 20%. Recoverable reserves of the field are estimated around 180 million barrels of oil equivalent, of which the majority is oil.

Monday, 18 December 2017

Submitting Plan for Development and Operation for Valhall Flank West

Submitting Plan for Development and Operation for Valhall Flank West

Aker BP ASA has submitted the Plan for Development and Operation for Valhall Flank West to the Norwegian Ministry of Petroleum and Energy, on behalf of the Valhall joint venture.
Valhall is a giant oil field in the southern part of the Norwegian sector in the North Sea. The Valhall Flank West project aims to continue the development of the Tor formation in Valhall on the western flank of the field, with the startup of operation in fourth quarter 2019.

Valhall Flank West will be developed from a new Normally Unmanned Installation (NUI), tied back to the Valhall field centre for processing and export.

The wellhead platform at Valhall Flank West will be fully electrified and will be designed to minimise the need for maintenance activities. The platform will be remotely operated from the Valhall field centre.

Recoverable reserves for Valhall Flank West are estimated to be around 60 million barrels of oil equivalent. Total investments for the development are estimated to NOK 5.5 billion in real terms.

Joint venture owners in Valhall are Aker BP and Hess Norge AS. Aker BP has entered into an agreement to acquire Hess Norge AS, and approval for submittal of the PDO to the MPE is conditional upon closing. Furthermore, Aker BP has entered into an agreement with Pandion Energy AS to divest 10% interest in the Valhall and Hod fields. Both transactions are subject to customary conditions for completion, including approval by the Ministry of Oil and Energy, Ministry of Finance and relevant competition clearance. The effective date of the transactions will be 1st January 2017, and closing is expected by the end of 2017.

Shared location for Gastech and GPEX will highlight modern energy transition

Shared location for Gastech and GPEX will highlight modern energy transition

Two international events to lead the global transition to a lower carbon economy by co-locating next year.

Gastech, the leading global exhibition and conference for the international gas, LNG and energy industries, and GPEX (Global Power & Energy Exhibition), the new hub for the international power and energy community, will share the same location in Barcelona next year.

The co-location of the events, which will be held in adjoining halls in the Fira Gran Via from September 17-20, 2018, supports the public-private drive towards a lower carbon environment with the synergies between the two creating further opportunities for exhibitors, delegates and visitors.

Gastech is regarded as the most significant meeting place for upstream, midstream and downstream gas and LNG professionals to convene and do business, and for more than 45 years it has been at the forefront of the international gas and LNG markets. The 2018 edition will see bigger, bolder and more innovative conference themes, ensuring the event remains at the forefront of the ever-evolving gas industry.

The GPEX exhibition and conference will focus on the transition of the electricity network, looking at the changing utility business model, as new technologies disrupt the centralised approach to power generation, transmission and distribution, with residential consumers and industrial and commercial energy users taking more control of their own energy production and consumption.

It will bring together the global power and energy community including governments, commercial and industrial power users, integrated energy companies, power producers and distributors, energy retailers and renewables, providing solutions for businesses adapting to the energy transition.

Gastech governing body and programme director Gavin Sutcliffe said: “As the international energy focus moves towards lower carbon energy we are seeing a greater alignment between the gas and power industries. Gastech has a tradition of being the place where gas conversations are made, and the co-location of GPEX with Gastech facilitates an extension of that important energy transition debate.

“Holding both events at the same location will allow 30,000 global energy professionals to access both Gastech and GPEX. This will bring together the gas and power communities who form the central core of the energy transition.”

Stewart Bundock, GPEX event director, added: “Building a resilient and integrated energy market across Europe and beyond is a priority for energy producers and distributors. Natural gas and renewables will be the winners in power generation and GPEX 2018, co-located with Gastech, will join the two communities under one roof to enhance the integrated energy dialogue and promote collaborative opportunities across the energy value chain.

DNV GL launches first class guideline for additive manufacturing

DNV GL launches first class guideline for additive manufacturing

DNV GL has published the first classification guideline for the use of additive manufacturing (AM) in the maritime and oil and gas industries. The guideline is designed to help manufacturers and sub-suppliers of materials, parts and components, service suppliers and end users adopting AM technologies, by ensuring that the parts or components created by an AM process and the materials from which they are created have the same level of quality assurance as traditionally manufactured products.        

Additive manufacturing is a catch-all term for industrial processes that create three-dimensional objects by adding layers of material. It includes such technologies as 3D Printing, Rapid Prototyping (RP), Direct Digital Manufacturing (DDM), layered manufacturing and additive fabrication.

“We have been investigating the potential of 3D printing for the maritime and oil and gas sectors since 2014,” says Marit Norheim, Vice President, Material Specialist, Hull, Materials and Machinery at DNV GL – Maritime. “With the introduction of the class guideline DNVGL-CG-0197, DNV GL is now ready to certify and support our customers and industry stakeholders to take advantage of this rapidly maturing technology. It will give end users confidence in the products and allow suppliers to offer their technologies and products for use in vessels and offshore installations.”

The latest AM processes allow printing in metal, something which is of importance to the maritime and oil and gas sectors. A variety of products and parts have now been successfully printed for the industry, including screw pins, bearing shells, box heat exchangers and propellers.

“Additive manufacturing means products and components can be printed according to local needs, or even onboard ships and offshore installations,” says Knut Ørbeck-Nilssen, CEO DNV GL – Maritime. “This equates to less lead time, less cost, less labour, fewer logistics, and less need to keep stocks of spare parts. AM can also be used for maintenance and repair, simply adding layers of material to worn components, thus negating the need to replace them.”

“AM parts that perform the same functions as those produced in traditional manufacturing environments must offer the same levels of quality assurance,” Norheim adds. “Similarly, the companies that have designed the parts must protect their intellectual property, so that customers can be sure they are receiving genuine products that are guaranteed fit for purpose. Therefore, this guideline is so important to all industry stakeholders.”

With the new guideline, DNV GL has created a clear pathway for AM certification and has the processes in place to assess every parameter that will impact upon the final products – from the material used to a technology assessment, manufacturing procedure qualification, data transfer, and the actual printing and post-processing.

Friday, 15 December 2017

UKCS operating costs decrease by 14% in 2016, falling for second consecutive year

UKCS operating costs decrease by 14% in 2016, falling for second consecutive year

Operating costs in the UK Continental Shelf dropped by 14% in 2016 with operators securing approximately £1.1 billion reductions in operating expenditure.

The “Analysis of UKCS Operating Costs in 2016” inaugural report, published today by the Oil and Gas Authority, shows that UKCS total operating costs fell for the second consecutive year in 2016, with more than half of UK operators achieving substantial cost reductions in 2016.
Lower costs are expected to be sustained for the next five years, supported by the efforts of those active in the UKCS to maximise economic recovery of its oil and gas resources.
The findings of the report include:

The average Unit Operating Cost fell in 2016, for the second consecutive year, to £12 per barrel of oil equivalent. The pace of cost reduction has slowed down, as Unit Operating Cost fell by 18% in 2016 compared with a 22% annual reduction in 2015. UOC in 2016 was over a third lower than the peak seen in 2014.

Excluding COP and start-up fields, total OPEX for continuing fields is lower and expected to decrease from 2017 onwards. There was high variation in costs between operators in the UKCS, with the highest UOC over 12 times more than the lowest UOC.

There was a strong positive relationship between production efficiency and UOC. The top quartile operators had an average PE of 84%. OPEX reduction in the UKCS was dominated by four operators who realised 60% of the total reduction in 2016. Total OPEX for the UKCS was £7.2 billion in 2016 compared with £8.3 billion the previous year.

The range of operators achieving reductions in operating cost is diverse – the top performing operators include new entrants, national oil companies, oil majors and independents.

Andy Samuel, Chief Executive of the OGA, said: “This report shows the significant progress industry has made towards consolidating the operational cost base in the UKCS. The reduction in Unit Operating Costs, driven by a combination of lower costs, higher efficiencies and higher production volumes, is a positive story for the UKCS through what has been a difficult operating environment in recent years.

“This analysis allows the OGA to identify cost-efficient assets and operators and provide benchmarking metrics which benefit our asset stewardship engagements and help drive further improvements in efficiencies. It is important that operators continue to collaborate, and share lessons learned to sustain cost efficiencies for the future while continuing to maintain high standards of health, safety and environmental management. This will enable the industry to withstand future oil and gas price fluctuations and be more profitable in periods of stability and growth.”

The report includes new information on UOC by field and geographical area, showing how costs are distributed at a micro level. The benchmarking data provided will aid peer group comparison and overall help validate the cost attractiveness of the UKCS.

Det Norske Veritas assumes full ownership of DNV GL

Det Norske Veritas assumes full ownership of DNV GL 

Stiftelsen Det Norske Veritas and Mayfair announce the sale of Mayfair’s 36.5% shares in DNV GL Group AS to DNV Holding AS. The agreement regarding the leading quality assurance and risk management company DNV GL was signed on 8th December 2017.

In 2012, Stiftelsen Det Norske Veritas and Mayfair agreed to build a global quality assurance and risk management leader well positioned to succeed in a rapidly transforming market: Germanischer Lloyd was merged with Det Norske Veritas to create DNV GL. Since the merger, the joint company has successfully adapted its organisation and realised significant synergies. It also strengthened its position in research and innovation and moved forward with its digital transformation.

“We are proud to have been part of building a leading quality assurance and risk management company over the past eleven years. Since we invested in Germanischer Lloyd in 2006, the company has expanded its position, and through the merger with Det Norske Veritas became a world market leader in its industries. The integration is now complete. We thank the Foundation for the collaboration, and we wish DNV GL and its employees continued success,” says Günter Herz of Mayfair.

The Foundation sees assuming full ownership of DNV GL as the best investment to fulfil its purpose of safeguarding life, property and the environment and to realise its strategy. The agreement between the two parties enables the Foundation to make this investment now and to provide continued support to DNV GL going forward.

“The merger between DNV and GL has created significant value, and we are thrilled about the opportunity to invest in DNV GL’s long-term success. 100% of the cash generated will remain within the Group to support further development and positioning of DNV GL globally. We thank Mayfair for its contributions to DNV GL over the past years,” says Leif-Arne Langøy, Chairman of the Board of Directors of Stiftelsen Det Norske Veritas. Leif-Arne Langøy is also Chairman of the Board of Directors of DNV GL.

Group President and CEO of DNV GL Remi Eriksen says that this is a new chapter in DNV GL’s history. “Moving forward with one strong owner with a long-term view and a fully aligned purpose will be good for DNV GL’s customers and employees.”

The DNV GL strategy, ‘Leading towards a digital, agile and efficient future’ remains unchanged. There will also be no changes to the management, organisation, name or branding. DNV GL’s headquarters for the Maritime business area will remain in Hamburg.

£7.5 billion Subsea industry supports 45,000 jobs, despite oil and gas downturn

£7.5 billion Subsea industry supports 45,000 jobs, despite oil  and gas downturn

Subsea UK’s latest business activity review reveals that the industry is generating annual revenues of £7.5 billion, compared to £8.9 billion in 2014.

The body which represents the country’s subsea industry also revealed that, despite the downturn in oil and gas, the subsea sector still supports around 45,000 jobs in the UK. This compares to around 53,000 three years ago.

Exports account for over half of annual revenues, while sales in offshore wind have risen from £770 million in 2014 to £1.3billion today. Sales in renewables are also forecast to increase with around a quarter of large companies anticipating more than 20% growth in this sector.

Underwater technology, systems, engineering and manufacturing have been helping recover more hydrocarbons from the North Sea since the eighties. This expertise honed in the UK has led to the creation of one of the UK’s largest industry sectors which are now involved in defence, oceanology and now offshore wind.

Subsea UK, whose 300 members make up the bulk of the country’s subsea supply chain, conducts regular reviews of the sector. The body’s chief executive, Neil Gordon, said: “It’s clear that, at the time of our last review, the industry was still riding the crest of a wave with revenues of almost £9 billion. The oil price crash and subsequent, prolonged downturn globally which led to the deferral or cancellation of major subsea projects, particularly in deep-water, has had a material impact on revenues and cost around 8,000 jobs.

“However, the subsea sector has appeared to have weathered the storm by increasing exports and diversifying, particularly into offshore wind, where the skills and technology are eminently transferable.”

The largest export markets for the tier 1 subsea companies are Scandinavia, West Africa and the Gulf of Mexico. For SMEs, this picture changes with South East Asia being the primary export market, followed by the Gulf of Mexico and the Middle-east, Scandinavia and West Africa.

Respondents expect Southeast and Central Asia to become more important export markets in the future, along with the Caspian and the Middle-east.

Around 80% of large companies are expecting to grow exports in the next three years, with a third expecting export sales to increase by between 10% and 20% and a fifth by over 20%
Meanwhile, 65% of SMEs believe they will increase exports, with the majority anticipating growth of between 10% and 20% and over a fifth anticipating more than 20% growth in international sales.

Mr Gordon believes that, with global expenditure estimates for subsea vessel operations and hardware over the next five years around $141 billion, the UK can still claim to be a world-leader with around a third of that annualised, global oil and gas market share. Similar figures for the offshore renewables markets globally are not available.

He added: “Since the eighties, Britain has pioneered subsea technology and expertise and become recognised as the global leader in subsea. I’m confident we can still claim to lead the way around the world, but we still need greater recognition of subsea as one of the UK’s best-performing industry sectors to help attract investment and talent and to work collaboratively with the government on diversification, internationalisation, innovation and skills.”

In 2013/14, Subsea UK estimated there were around 800 companies operating in subsea across the country from the north-east of Scotland to the south-east of England. Around 20% of those have gone into liquidation, merged, been acquired or retreated from subsea operations.

Subsea UK’s membership, which was the survey base for this business activity review, makes up around 90% of monetary value of the whole subsea sector.

Subsea UK represents the entire supply chain from small, niche technology companies to the tier 1 contractors such as Subsea 7 and Technip, to the multi-national exploration and production companies.

Thursday, 14 December 2017

SNC-Lavalin and Saudi Aramco sign MoU supporting in-country opportunities

SNC-Lavalin and Saudi Aramco sign MoU supporting in-country opportunities

SNC-Lavalin and Saudi Aramco signed a Memorandum of Understanding signalling SNC-Lavalin’s continued commitment to creating and accelerating opportunities for local workforces in Saudi Arabia. 

The MoU supports Saudi Aramco’s In-Kingdom Total Value Add program, which applies to Saudi Aramco suppliers and drives the localisation of oilfield services and equipment value chain, to strengthen and diversify the Saudi economy; transfer technologies, skill and knowledge through training and development; and create thousands of new jobs for the growing Saudi population.

Neil Bruce, President and CEO of SNC-Lavalin, was present for the signing and said: “SNC-Lavalin has been operating in Saudi Arabia for over 40 years, with a clear commitment to developing local talent and creating opportunities for a local supply chain. In recent years, our presence has grown rapidly, in large part due to our ongoing Saudization efforts and on ground presence.” 

“I am proud to sign the agreement, which reflects our long-term commitment to the region and our valued and trusted relationship with Saudi Aramco, and gives a working platform to accelerate our ongoing efforts to meet and exceed the objectives set within the IKTVA initiative.”

Christian Brown, President of Oil and Gas in SNC-Lavalin added: “Our work for Saudi Aramco is of great importance to us; we have close to 10,000 team members working in the country and putting in place such a framework around IKTVA means we can continue to grow and execute additional scopes on behalf of Saudi Aramco. Our presence, scale and experience in the region mean we are well placed to implement this, and we see strong demand for similar initiatives supporting economies and social development in our active bidding.”

Open Ocean and VORTEX team up to offer a complete online solution for offshore wind development

Open Ocean and VORTEX team up to offer a complete online solution for offshore wind development

Open Ocean, a pioneer in Marine Data Intelligence, launched in 2015 Metocean Analytics, the first online offer for metocean studies on-demand. Today, Open Ocean teams up with Spanish wind expert VORTEX to make Metocean Analytics the most complete online solution for site analysis during offshore project development.

VORTEX is an independent private company which has been providing wind data and analysis to the wind energy sector since 2005. Based on its team of wind and site engineers, atmospheric physicists and computer experts, VORTEX has built a solid international reputation for providing high-quality wind information for any location in the world. VORTEX has designed relevant solution for each phase of a wind project development.

Today, VORTEX wants to reach a wider range of users by teaming up with Open Ocean and offering its services through the Metocean Analytics solution.

Metocean Analytics is already participating in the digitalisation of the offshore energy sector by democratising the access to high-quality data and rigorous statistical analysis. Metocean Analytics simplifies and accelerates the analysis process for offshore development sites providing average metocean conditions, as well as extreme value analysis and operating weather windows.

Open Ocean keeps pushing further this necessary digitalisation process of the sector by offering data from all the best possible sources and complementary services through collaborations with expert partners.

Metocean Analytics is upgraded by including the SERIES and FARM solutions from VORTEX. You can obtain even more accurate site wind analysis through Metocean Analytics with the expert solutions from VORTEX. Offshore wind developers will get the best of both worlds from the combination of high resolution, high-quality wind data with the most advanced online offshore conditions analytics tool available on the market.

VORTEX and Open Ocean, two successful European SMEs, join forces to make offshore wind development easier, simpler and faster than ever.

 “We are very proud of this new partnership launched with VORTEX. Our goal is to bring the best offshore data analytics to all the actors of the offshore energy sector. With VORTEX solutions made available through Metocean Analytics, we add very valuable additional data for analysis directly accessible online. This will accelerate the site analysis process for offshore wind developers. We are keen on continuously providing new solutions to help the offshore renewable energy development” explains Renaud Laborbe, Executive Chairman of Open Ocean.

Trelleborg supplies suite of solutions to world's first floating LNG ship-to-shore system

Trelleborg supplies suite of solutions to world's first floating LNG ship-to-shore system

Trelleborg, the world leader in engineered polymer solutions, has hailed the recent successful test of the Universal Transfer System (UTS) conducted with Connect LNG and Gas Natural Fenosa, as tangible evidence of the new applications that its suite of products for jetty-less LNG transfer can unlock in this challenging field.

The UTS transferred LNG from the Skangas-chartered LNG carrier Coral Energy to the onshore terminal at the Norwegian port of Herøya on 7th October and is now in full commercial operation. A ‘plug and play’ solution, the UTS requires no modifications to the LNG carrier – instead, the platform manoeuvres offshore to meet a vessel, removing the need for costly and environmentally intensive dedicated small/medium-scale LNG vessel harbour and jetty structures.

The system consists of Trelleborg’s Cryoline LNG hoses, attached to a floating platform, which incorporates Trelleborg’s ship-shore link technology and a selection of its marine fender systems.

Vincent Lagarrigue, Director of Trelleborg’s oil and marine operation, commented: “The UTS shows that LNG infrastructure doesn’t need to be bound by the same thinking that underpins transfer solutions for fossil-based energy. Instead, it demonstrates how new ideas are creating the foundations for safe, efficient and convenient infrastructure that can keep pace with the rapid evolution of the LNG market, both as a power source and marine fuel.”

Magnus Eikens, Chief Commercial Officer of Connect LNG, added: “Trelleborg’s expertise in fluid handling and LNG transfer has made it an invaluable partner in this project. The Cryoline LNG hose is an integral part of this solution, thanks to its durability, flexibility, and safety features. What’s more, its ship-shore link technology and marine fender expertise are vital in supporting UTS LNG transfer operations.”

Richard Hepworth, President of Trelleborg’s marine systems operation, said “The UTS is an important forward-thinking development. Our Universal Safety Link (USL) and the Sea Guard and Super Cone fenders are used in many LNG applications already. Integrating them into such an innovative solution as this will help ensure the safe, efficient transfer of LNG into markets and locations that would have previously been considered uneconomic. We are proud to be part of a project that promotes the expansion of the LNG value chain.”

José Miguel Moreno, Director at Gas Natural Fenosa, commented: “The innovation demonstrated by Trelleborg and Connect LNG has delivered a game-changing solution for the LNG industry. We now have a market-ready system that opens a world of possibilities in the LNG small and medium scale business thanks to this collaboration.”

Wednesday, 13 December 2017

Spirit Energy launched following completion of Centrica and Bayerngas Norge exploration and production joint venture

Spirit Energy launched following completion of Centrica and Bayerngas Norge exploration and production joint venture

Spirit Energy, the exploration and production joint venture which combines Centrica plc’s exploration and production business with Bayerngas Norge AS, has begun trading as an independent oil and gas operator.  Completion of the transaction – which was announced on 17th July 2017 – follows receipt of all the required regulatory approvals and Spirit Energy now becomes a leading independent European exploration and production company.

Centrica plc owns 69% of Spirit Energy, with Bayerngas Norge’s former shareholders, led by Stadtwerke München Group (SWM), owning 31%.

This year’s production from the combined portfolios is expected to be around 50 million barrels of oil equivalent (mmboe) from 27 producing fields, and the total for the 2016 2P reserves and 2C resources were 625 mmboe. The company employs more than 700 people in the UK, Norway, Netherlands and Denmark.

The formation of Spirit Energy creates a strong and sustainable European exploration and production business, combining Centrica’s cash-generative and relatively near-term production profile with Bayerngas Norge’s more recently on-stream producing assets and development portfolio. The new company will be a robust, self-financing entity, and will invest in the range £400-£600 million per annum to deliver sustainable medium-term production of 45-55 mmboe. The transaction is expected to generate £100-£150 million net present value of synergies and the joint venture will have the opportunity to strengthen through further consolidation and joint ventures.

For Centrica, the creation of Spirit Energy completes the first phase of its planned portfolio transformation, as it continues to pursue delivery of longer-term returns and growth with a greater focus on its customer-facing businesses within clear strategic frameworks for both Consumer and Business divisions.  The establishment of Spirit Energy also gives its shareholders greater strategic optionality including the potential to participate in further industry consolidation.

Spirit Energy’s focus in 2018 will be to maximise efficiency from its producing assets, as well as progressing several key projects including the developments of Maria and Oda, appraisal drilling at the Fogelberg discovery and drilling several exploration prospects. Spirit Energy will also partner with Wintershall in submitting a plan for development and operation for the Skarfjell development.

Iain Conn, Group Chief Executive of Centrica plc, said: “I’m delighted that the Spirit Energy joint venture has completed, creating a more focused and sustainable European exploration and production business which will contribute to the resilience of Centrica while limiting the Group’s exploration and production participation. With the creation of Spirit Energy, we have now completed the first phase of our portfolio transformation as we reallocate resources towards our customer-facing businesses, leaving Centrica well-positioned to deliver longer-term returns and growth.

“As one of the largest independent exploration and production companies in North-West Europe, Spirit Energy will have the possibility to participate in further consolidation and joint ventures, and creates further optionality for Centrica’s shareholders.”

Florian Bieberbach, Chief Executive of Stadtwerke München Group, said: “Combining our exploration and production business units will enable us to run our joint business more effectively and cost efficiently in the future. Future investments and risks will be spread broader in the more diversified and balanced portfolio. SWM Group is looking forward to the future cooperation with Centrica in the joint company Spirit Energy.”

Chris Cox, Chief Executive of Spirit Energy, said: “Teams across both Centrica’s exploration and production business and Bayerngas Norge have been working hard over the last few months to combine the businesses and today that hard work is reflected in the launch of Spirit Energy.

“Now that both businesses have been brought together, these teams and complementary portfolios set us up to be a strong and sustainable exploration and production business, built for the long-term and committed to Europe.”

Chris Cox will be joined on the Spirit Energy management team by Andrew le Poidevin as Chief Financial Officer and Gerry Harrison as Chief of Staff. Spirit Energy’s board will be made up of Chris Cox, plus four appointees from Centrica and two from Stadtwerke München. It will be chaired by Centrica’s Group Executive Director Mark Hanafin.

Haskel to develop clean energy technology as part of Fuel Cells and Hydrogen Joint Undertaking

Haskel to develop clean energy technology as part of Fuel Cells and Hydrogen Joint Undertaking

European partnership supports research and development of technologies that have the potential to advance the hydrogen market and impact economic growth.

Haskel International, an Accudyne Industries brand and a leader in high-pressure solutions, is pleased to announce its participation in the Fuel Cells and Hydrogen Joint Undertaking.
FCH JU is a unique public-private partnership that supports research and development of fuel cell and hydrogen energy technologies in Europe. Its members are the European Commission, industry group Hydrogen Europe and research group Hydrogen Europe Research. The partnership aims to accelerate time-to-market of technologies that have the potential to create a carbon-lean energy system and contribute to economic growth.

The H2Ref project, Hydrogen Refuelling Research and Development, is co-financed by European funds from the Fuel Cells and Hydrogen Joint Undertaking under grant agreement number 671463. In addition to Haskel, the consortium members working on the H2Ref project include:

Centre Technique des Industries Mechaniques (CETIM) (Program Coordinator); The CCS Global Group Limited; H2NOVA; Université de Technologie de Compiègne (UTC) and Hexagon.

Haskel is proud to be part of Europe's forward-thinking approach to the hydrogen industry. The team has been exploring value chains for both hydrogen refuelling and power-to-hydrogen applications.

Stewart Anderson, Haskel Europe’s Chief Hydrogen Engineer, said, “Hydrogen is a fast-growing market, and Europe’s investment in hydrogen research and development will benefit not only European manufacturers but the world at large.” Haskel’s engineers are focused on designing application-specific equipment to fit the needs of the hydrogen market. 

They recently started taking orders for the H-Drive, their new generation hydraulic-driven gas booster. The H-Drive is designed to safely perform in a wide range of demanding high-rate, high-pressure gas compression and transfer applications.

Genoil signs agreement to develop five oil and gas fields in Russia

Genoil signs agreement to develop five oil and gas fields in Russia

Genoil, the publicly traded clean technology engineering company for the petroleum industry, has signed an agreement to develop five oil and gas fields in the Sakha Republic (Yakutia), Russia, with recoverable reserves of 1.8 billion barrels. The scale of the project will require $35 billion with the first phase costing $6 billion representing a landmark agreement for Genoil.

Genoil will provide technology and project consultancy, as well as advising on the finance and development of upstream and downstream projects in Yakutia. Genoil will act as the lead consultant on all aspects of the project which will include engineering procurement and construction (EPC), equity and debt financing, and oilfield services, as well as oil field operations and natural gas development.

Under the agreement, Genoil will develop oil fields and refineries and will use its advanced Hydroconversion Upgrader (GHU) desulphurisation technology, which converts heavy or sour crude oil into much more valuable, compliant low sulphur oil, for a low cost at the fraction of the cost of traditional refining processes.

The first oil field block will yield 240,000 bpd production and is directly adjoining the Khatanga block being developed by Russian state oil giant Rosneft. The estimated cost to connect this first oil block to the nearby East Siberia-Pacific Ocean (ESPO) and the Western Siberian pipeline systems is an additional $1.1 Billion. The ESPO pipeline is likely to be used by many other major oil companies developing energy assets in the Arctic.
The seismic work already completed on this property shows geological reserves in this first block estimated more than 80 million tons (550 million barrels of oil equivalents). and have hydrocarbon resources of approximately 800-850 million tons of oil equivalents (5.5-6.0 billion barrels of oil equivalents).

Bruce Abbott, Chief Operating Officer, Genoil, commented: "The agreement to develop these five blocks and unlock the potential of the oil reserves in Yakutia represents a landmark opportunity for Genoil and our long-term shareholders." Mr Abbott continued: "This opportunity represents the culmination of our hard work to integrate our GHU Technology into the development of major oil fields right from inception. We continue to build on the successes we have had in developing international relationships across the globe. We look forward to reporting on the progress of this project on an ongoing basis as it develops."

In September 2017, Genoil signed a tri-partite science, research and technical cooperation agreement with two leading Russian institutions, the UFA Scientific Research Institute of Petroleum Refining and Petrochemistry, located in Bashkortostan, and the OJS VNIIUS Institute, located in Tatarstan. The partnership focuses on the petrochemistry, petroleum refining and gas chemistry industries where, through joint co-operation and a wide base of expertise, the parties саn add significant value to client proposals.

Tuesday, 12 December 2017

Oasis Petroleum Announces Delaware Basin Acquisition

Oasis Petroleum Announces Delaware Basin Acquisition 

Oasis Petroleum Inc has announced it has entered into a definitive purchase and sale agreement with Forge Energy LLC, to acquire 20,300 net acres in the Delaware Basin for approximately $946 million.

This will consist of approximately $483 million in cash and 46 million shares of the Company's common stock valued at approximately $463 million as of the close of trading on 8th December 2017.  The Acquisition will be funded through a combination of the OAS Shares issued to the Seller, a draw on the Company's revolving credit facility, and/or capital markets transactions, depending on market conditions. Additionally, Oasis expects to divest non-core Williston Basin acreage up to $500 million in 2018.

The Acquisition has an effective date of 1st December 2017 and is expected to close in February 2018, at which time the owners of the Seller will receive full consideration less a deposit paid. The transaction is subject to customary closing adjustments and conditions.
Tommy Nusz, Oasis's Chairman and Chief Executive Officer, commented "This accretive transaction more than doubles Oasis's core net inventory and represents a unique opportunity to acquire a highly complementary asset to Oasis's premier Williston Basin acreage that positions the Company to further capitalise on its operational strengths. Our leading track record of efficient full field development in the Williston Basin positions Oasis to succeed as we expand operations into the Delaware Basin. 

“Our new Permian Assets deliver a consolidated position in the deepest and highest pressured part of the Delaware in the heart of the oil window. The Seller and offset operators have materially de-risked this position with recent well performance across the Wolfcamp and Bone Spring formations, giving us additional confidence in asset quality and well performance. 

“This transaction further improves the capital efficiency of our development program, while providing an opportunity to divest and realise value for quality assets that fall deeper in our development program. We are excited about this new chapter and remain committed to our current capital-disciplined and returns-focused execution plan in the Williston Basin.  
“As we execute our combined program in 2018, we expect to be free cash flow positive on our exploration and production business running a $55 WTI oil price." 

Highlights of the acquisition are as follows:
Approximately 20,300 net acres have been acquired in the Delaware Basin across Loving, Ward, Winkler and Reeves Counties, Texas; with approximately 3,500 barrels of oil equivalent ("Boe") per day produced in November 2017 ($170 million PDP value at 30th November 2017, strip pricing).

A gross of 601 operated locations (76% working interest) and 507 net core locations targeting the Wolfcamp A, B, and C and the Bone Spring formations, with extensive additional upside from other intervals in the column; included in this, largely contiguous acreage blocks that allow for longer lateral development (expected median lateral length of approximately 8,000 feet).

The company will also transfer technical, operational and managerial knowledge from the full-field development of the Williston Basin to the Delaware Basin, in addition to future efficiencies from the vertical integration of Oasis Midstream Services LLC and Oasis Well Services LLC, and accretive to per-share NAV, long-term cash flow, balance sheet, core inventory and overall inventory.

The company will be trading attractive non-core acreage in the Williston Basin for core Delaware Basin acreage, and will expect to drill 16 to 20 gross wells and complete 6 to 8 gross wells with a capital program of approximately $100 million in 2018 with an initial running of one rig, potentially adding a second rig in the second half of 2018.

Oasis’ production for October was approximately 70,000 Boe per day, and November operational production exceeded 72,000 Boe per day, already surpassing the planned 2017 exit rate. Considering the increased production, guidance for the fourth quarter of 2017 is increased from 69,000 – 72,000 Boe per day, to 71,000 – 73,000 Boe per dayOasis expects to continue to run five rigs in the Williston Basin and will assume one rig currently run by the Seller in the Delaware Basin.  

Additionally, Oasis expects lease operating expenses in the fourth quarter of 2017 to range between $7.00 and $7.50 per Boe and differentials to range between $0.50 and $1.00 per Boe. Oasis continues to expect production in the Williston Basin to exceed 83,000 Boe per day exiting 2018, not accounting for volumes to be divested through planned asset sales, and expects production to grow to over 5,000 Boe per day in the Delaware Basin exiting 2018. 

As of November 30, 2017, Oasis had $333.0 million drawn and $10.5 million in letters of credit outstanding under its $1.6 billion borrowing base and $2.1 million in cash.

Gas discovery at KSR-16 well, Morocco

Gas discovery at KSR-16 well, Morocco 

SDX Energy Inc, the North Africa focused oil and gas company, has announced that a gas discovery has been made at its KSR-16 development well on the Sebou permit in Morocco (SDX 75% Working Interest). SDX’s portfolio includes high impact exploration opportunities in both Egypt and Morocco.

The KSR-16 well was drilled to a total depth of 1,896 metres and encountered 14.2 metres of net conventional natural gas pay in the Hoot formation. The Company expects that the well will be connected to the existing infrastructure and placed on production within the next 30 days.

The drilling rig will now move to the ELQ-1 prospect on the Gharb Centre permit and drill the first commitment well on this recently acquired licence.

The recently completed KSR-15 well has been connected to the existing infrastructure and it is anticipated that test production will commence early next week.

Paul Welch, President and CEO of SDX, commented: “We are pleased to have made another discovery during our ongoing nine well drilling campaign, with this well exceeding our pre-drill net pay estimates by more than 50%. Our drilling activity in Morocco is off to an excellent start and provides us with renewed confidence in the overall programme.

The succession of above expectation well results allows us to accelerate our new customer acquisition activities and may result in us bringing forward the start of our forecast increased gas sales. I look forward to reporting on our progress in this regard and the test results of the KSR-16 well in due course.”

IOS confirms commitment to North-east with £5.5million investment programme

IOS confirms commitment to North-east with £5.5million investment programme

Independent Oilfield Services (IOS), Peterhead-based storage and inspection firm, is to invest £5.5million in the North-east of Scotland over the coming months.

The company has already invested more than £4million in its state-of-the-art storage and inspection facility at Longside Supply Base near Peterhead. In the first phase of this additional investment, the company has brought its current 32-acre site on the former airfield for £2.5million.

The deal will be followed by a further investment of around £3million which will create new jobs for the local region with IOS’s plans for major expansion at the Longside facility.

Established in 2014, IOS has seen steady growth in turnover over the past year and, with several new contracts wins secured, is forecasting a further 30% turnover increase over the next 12 months.

The company has leased the Longside site since it started up and was three years into a 10-year lease before taking the decision to buy the land outright to support its future growth plans. IOS retains a 15-year option to lease additional sites at Longside with the potential to extend the facility to 100 acres.

Located just four miles from the quayside of Peterhead’s deepwater port, the Longside Supply Base incorporates both hard-standing outdoor storage and internal warehouse storage. Current services include OCTG, drillpipe and offshore inspection, equipment rental, transportation and tubular management.

“The decision to buy the site confirms our long-term commitment to the area and our plans for on-going investment in the region,” said Glynn Geddie, Managing Director at IOS. “We are a privately-owned company and through private funding, we look forward to continued growth in this region.
“We opened the Longside facility in direct response to the shortage of industrial storage space in the North-east and since then we have seen rapid growth in our customer base. Until we opened most equipment and tubulars had to be transported considerable distances by road to reach suitable storage and inspection facilities. Our location, just a short distance from Peterhead port, and our range of facilities and services make us ideally placed to provide a cost-effective alternative.

“The £49million Peterhead Port development has increased its capability to service oil & gas clients operating in the UKCS and through the investment in our company we are committed to supporting that by providing the facilities that operators and service companies sailing into Peterhead will need.
“As part of this, we have formed an alliance with NorSea Group (UK), operators of Peterhead’s Smith and Merchant quays. The agreement combines their full range of quayside services and logistics expertise with the benefits of conveniently located storage and inspection facilities to provide a full one-stop-shop service for the customer,” said Mr Geddie.

In the past year, IOS has taken on an additional 25 employees, doubling the previous workforce. The expansion plans will create an additional 20 jobs within the coming months.

Included in the expansion plans is a new machine shop which will be operational in January. The three-acre site will be owned by IOS, but the company has agreed to a lease deal with Aberdeen-headquartered NXG Oilfield Services Ltd for its use. The machine shop will provide machinery, manufacturing, hard banding and a make-and-break facility.

“We are absolutely committed to the Peterhead area and the role we can play in the local economy,” said Mr Geddie. “Since 2014 we will have invested almost £10million and created 70 new jobs with seventy percent of our employees coming from the Buchan area. We would anticipate that total rising in line with future company growth.

“We are also proud to support our local community and have signed up as shirt sponsors for Peterhead FC’s first team.”

The company expects to make further announcements about major contract wins and detailed expansion plans for the Longside facility soon.

Monday, 11 December 2017

Premier Oil PLC: Sale of interest in ETS pipeline

Premier Oil PLC: Sale of interest in ETS pipeline

Premier has announced that it has entered into a sale and purchase agreement to sell its entire equity interest in the Esmond Transportation System pipeline to CATS Management Limited, an Antin Infrastructure Partners portfolio company.

Under the terms of the SPA, Premier will receive cash consideration of up to £23.6 million for its entire 30% interest in ETS. The consideration consists of an initial upfront payment of £21.0 million (subject to certain customary financial adjustments) payable on completion, plus a future potential payment of up to £2.6 million linked to the achievement of certain key milestones in respect of any future development of the Pegasus field. Disposal proceeds will be used to pay down Premier’s existing debt.

The ETS pipeline was constructed to transport gas from Esmond Area fields to the Bacton gas terminal on the North Sea Coast in North Norfolk. The pipeline is currently operated by Perenco UK Limited as operator of the Trent and Tyne fields and is used as the export route for the Cygnus gas field recently brought on stream by ENGIE.

The effective date of the sale is 1st January 2017. Completion remains subject to obtaining all normal and necessary third-party consents and regulatory approvals including discharges and release of securities. Premier expects the sale to complete in 1H 2018.

Jefferies International Limited acted as financial advisor to Premier, together with Centrica plc and Perenco UK Limited who have also entered separate SPAs, to sell their respective interests in the ETS pipeline to CATS Management Limited.

Tony Durrant, Chief Executive, commented: “The sale of the ETS pipeline interest is another step-in realising value from the EON UK portfolio acquired by Premier for $120 million in 2016. The ETS pipeline does not serve any fields owned by Premier and is therefore non-core to the group.”

Valorem Energy LLC closes on $285 MILLION acquisition of Williston Basin interests

Valorem Energy LLC closes on $285 MILLION acquisition of Williston Basin interests

Valorem Energy, LLC, and certain wholly-owned subsidiaries, an independent oil and natural gas company headquartered in Oklahoma and backed by the Kayne Private Energy Income Fund L.P, has announced that it has closed on its acquisition of LINN Energy, Inc.’s Williston Basin interests for a purchase price of $285 million, subject to customary purchase price adjustments.

The acquired assets consist of approximately 20,000 net acres in North Dakota, South Dakota and Montana with an estimated third-quarter net production of 8,750 barrels of oil equivalent per day. The sale has an effective date of 1st March 2017.

“We are excited to announce our first acquisition since forming Valorem earlier this year. I am very proud of the team’s accomplishments thus far, and we are thrilled to own such high-quality assets. We believe this acquisition provides us with an initial building block to our long-term strategy of operating large oil and gas assets and achieving superior returns for our investors,” commented Justin Cope, Chief Executive Officer of Valorem.

Danny Weingeist, Managing Partner at Kayne Anderson, said, “We are proud of the Valorem team and believe the assets are a great fit for both Valorem’s and the Fund’s strategies. We look forward to working with Valorem to deploy additional capital.”

JP Morgan Chase Bank, N.A., Citigroup Global Markets, Inc. and Wells Fargo Securities, LLC acted as joint lead arrangers on Valorem’s debt financing for the acquisition. In addition, Vinson & Elkins L.P. provided legal counsel, Mobius Risk Group served as marketing and derivatives advisor and Opportune LLP provided due diligence and integration assistance to Valorem.

OEM wins second consecutive WeDo Entrepreneurial Awards

OEM wins second consecutive WeDo Entrepreneurial Awards

Oil and gas and marine services company, OEM Group, is celebrating after winning a second accolade, two years in a row at the prestigious WeDo Scotland Entrepreneur Awards held at the Sheraton Grand Hotel in Edinburgh.

The company picked up the High Growth Award for showcasing growth across the business covering increased revenue, profit, staffing levels and geographical locations.

Last year, managing director Barry Park won the WeDo Young Entrepreneur of the Year Award. This followed on from picking up Emerging Entrepreneur of the Year at the Elevator Awards a few months prior.

The WeDo Scotland Entrepreneur Awards is an annual celebration of outstanding enterprising success recognising the vision, ability and contribution of the country’s businessmen and women.

Park established the oil and gas and marine services firm in 2012 after spotting a gap in the market for diesel engine services, spare part procurement and fuel conditioning for the oil and gas, marine and energy sectors. The company now has 30 employees based in offices in the UK, Australia and the United Arab Emirates.

On winning the award, Park said: “To be recognised by the judges at the WeDo Awards for a second-year running is incredible and we’re very humbled by the experience especially as the standard of the competition in the High Growth category was extremely high.

“It’s been a fantastic but sometimes challenging journey for OEM Group since we started out just five years ago. The downturn in the Industry added more challenges than you first anticipated when starting a new business. Through strategic planning and targeting key customers and new territories along with adding in new product lines, we have grown from strength to strength. The team within OEM is the key to its success to date, without the right people it would have been difficult to achieve what we have to date.

“The OEM team works very hard and deserve the acknowledgement for remaining loyal to the business and our clients in this difficult global climate.”